Under Armour’s QQ1 2025 results show a challenging revenue environment with a material decline year-over-year and quarter-over-quarter, accompanied by negative profitability metrics. Revenue stood at approximately $1.1837 billion, a 20.35% YoY drop and an 11.14% QoQ decline. Gross margin remained solid at about 47.5%, but operating and net margins remained negative, with operating income at -$299.7 million and net income at -$305.4 million, translating to an EPS of -$0.70. The quarter delivered meaningful cash flow strength, with net cash provided by operating activities of about $153 million and free cash flow of roughly $107 million, supporting a robust cash balance and a net cash position on the balance sheet.
Despite the profit pressures, Under Armour benefits from a durable liquidity profile: cash and cash equivalents near $0.88–0.90 billion, total debt around $0.60 billion, and net debt around a negative (net cash) position of roughly -$0.29 billion. The company also reports a favorable current ratio (~1.73) and a reasonable quick ratio (~1.08), yet inventory build remains a notable risk driver with inventory days around 162 and a cash conversion cycle of about 113 days. Management commentary (where available) and forward-looking indicators will be critical to assess the trajectory of gross margin stabilization, cost structure optimization, and demand normalization in key regions.
Overall, the investment thesis hinges on whether Under Armour can stabilize top-line performance, improve or stabilize gross margins, and convert operating discipline into a path toward positive profitability while maintaining/liquefying its strong liquidity position. The near-term outlook is uncertain given macro consumer demand dynamics and competitive intensity in the apparel space, but the balance sheet and cash flow generation provide a cushion for near-term strategic initiatives.